A few years back, while I was visiting the United States, a man said to me, "They hate us but they sure love our money!"
"They," of course, referred to the people in less-developed countries who seem to regularly be protesting against "us" (the United States). His comment was one of those quick and simple observations, given with a sense of knowledgeable authority, that make a very complex issue seem rather straightforward and uncomplicated.
Unfortunately, many of us often do like to boil multifaceted problems down to simple, one-sentence assertions of "truth." It most certainly makes life easier, but also suggests a serious lack of curiosity to really understand the roots of serious problems.
It is true that less-developed nations constantly seek our aid, but also seem to be relentlessly criticizing us. Are their criticisms an indication of hatred, or are they merely a reflection of painful reality?
A few examples might not give a complete answer, but perhaps will spark our curiosity to seek a deeper truth.
The majority of Africans rely on agriculture for their survival. In Central and West Africa, more than 10 million people are cotton growers. Millions of others gain at least part of their income from this crop, which is also an important source of government revenue for health and education. The World Bank reports that this region is among the lowest-cost producers of cotton in the world. Yet despite being able to produce high quality cotton at a cheap price, Central and West Africa are facing serious economic difficulties because they can no longer afford to grow and export their major crop.
Part of the problem is created by agricultural subsidies in the United States. Agricultural subsidy is the process whereby governments give large sums of money to agriculture traders and farmers to increase their overall profits. This allows these exporters to drastically reduce the prices of their goods. Recently, President Bush signed into law a new farm bill worth $180 billion that will raise U.S. agricultural subsidies up to 80% a year for the next 10 years. This means that U.S. producers will market crops at very low prices, and then have their incomes topped up by government subsidies. When these U.S.-produced crops hit the global market, prices plummet and local farmers can no longer sell their commodities. They quickly fall into poverty and need international aid to simply survive.
In 2001-2002, U.S. farmers reaped a bumper harvest of subsidies amounting to $3.9 billion-double the level in 1992. The largest 10% of cotton farms received three quarters of the total payments. In 2001, only 10 farms received subsidies equivalent to $17 million.
Tyler Farms in Arkansas is one of the largest cotton farms controlling about 40,000 acres. In 2001, they received almost $6 million in subsidies-equivalent to the average income of 25,000 people in Mali.
Small-scale U.S. cotton farmers also suffer from the low prices, as they do not receive significant subsidies. In other words, small farmers who pay income tax help provide for the large subsidies the big agribusinesses receive from the government. The 2002 Farm Bill acts as a welfare program for agribusiness, with U.S. taxpayers footing the bill.
But, you might say, the U.S. provides millions of dollars in aid to these poor countries. Doesn't that make up for losses from these subsidies?
In reality, U.S. cotton subsidies total more than three times the entire U.S. Agency for International Development (USAID) aid budget for Africa's 500 million people. The economic losses inflicted by the U.S. cotton subsidy program far outweigh the benefits of its aid. Mali received $37 million in aid in 2001, but lost $43 million as a result of lower export earnings. In other West African countries like Burkina Faso and Chad, where cotton accounts for more than one-third of export earnings, the losses already represent around three times the savings provided through debt relief.
Statistics suggest that for every dollar given to poor countries in aid, they lose two dollars to rich countries because of unfair trade barriers against their exports. It's a downhill battle and with so much going against them, it is virtually impossible for hardworking farmers in Africa, Asia and Latin America to survive.
Another example comes from Haiti. When the International Monetary Fund (IMF) pressured Haiti into liberalizing its rice markets in the mid-1990s, the country was flooded with cheap U.S. imports. Local production collapsed, along with tens of thousands of rural livelihoods. Haiti today spends half of its export earnings importing U.S. rice. Sadly, Haiti is the poorest country in the Western Hemisphere while the United States is the richest country in the world. Is it any wonder that hungry and angry farmers occasionally hit the streets to demonstrate?
Or take the case of Mexico. The United States exports corn at prices 20 percent below the cost of actual production, and wheat at 46 percent below cost. This has resulted in Mexican corn farmers being put out of business. Consequently more and more desperate Mexican farmers sneak into the U.S. to seek jobs.
Solving much of the world's poverty is not simply a matter of giving some aid. It is also about just economic relationships between powerful nations and weaker ones. If Africa, East Asia, South Asia and Latin America were each to increase their share of world trade by only 1 percent, the resulting gains in income could lift 128 million people out of poverty. But they cannot increase their share of world trade as long as the United States and the European Union provide such high subsidies on the very products poor nations need to export.
As one observer said, "It's a classic case of giving with one hand while at the same time snatching away with the other."
So perhaps the angry demonstrations we often see on television are not a reflection of hatred toward us, but rather a plea for a chance to participate more equally in global economic activities and thus avoid the need to beg for more aid.
[Author's note: The source for much of this information is Oxfam America. More information is available at <http://www.oxfamamerica.org/advocacy/>.]